Subcontractor Agreement

Subcontractor Requirements
Signed subcontractor agreement (initial all pages)
Completed and signed DWC-83(use if you don’t
have any employees) or use DWC-85 Form (If you
do have employees.)
Insurance Certificate with SGC Homes as
Certificate holder
Completed and signed w9
__________________________________
Contractor Signature
Date
Rev.01 1.1.14
SUBCONTRACTOR AGREEMENT
This SUBCONTRACTOR AGREEMENT (this “Agreement”), dated ____________ ____, 20___,
(the “Effective Date”) is entered into by and between _______________________________________,
(“Subcontractor”) and SGC Homes, LLC (“General Contractor”). Subcontractor and General Contractor
may be herein referred to, individually, as a “Party” and, jointly, as the “Parties”.
For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Subcontractor and the General Contractor hereby agree as follows:
Article 1. Statement of Work
From time to time, Subcontractor may provide services to General Contractor for an arranged fee
(each such service assigned, a “Project”). Each such Project may be only a part of the work involved in
the design, construction plan and/or schematics (jointly, the “Building Plan”) on the construction location
(the “Site”). Additional subcontractors, unrelated to Subcontractor, may be assigned by the General
Contractor to other preceding, concurrent or succeeding projects under separate Subcontractor
Agreements. In addition to the terms and conditions negotiated by the Parties for a particular Project
(“Project Workorder”), General Contractor and Subcontractor hereby agree that the terms and conditions
of this Agreement shall apply whenever Subcontractor accepts a Project assigned by the General
Contractor.
Article 2. Payments
A.
Prior to beginning work on any Project, Subcontractor shall provide a signed estimate for the total
cost of all services to be included in the Project (the “Estimate”).
B.
The General Contractor shall pay Subcontractor for work done on the Project in arrears based on
receipt of Invoices, as defined below, from Subcontractor, which itemize the costs for the percentage of
work completed in the time since payment of the last Invoice. Such Invoices shall request payment based
on the amount of the Estimate and any amounts in excess of the Estimate (an “Overage”) shall be fully
explained by the Subcontractor in order for payment of such Overage to be considered for payment by
General Contractor. All payment requests for work properly completed by Subcontractor during any one
week period (each, an “Invoice”) shall be submitted to the General Contractor in an invoice format by
Wednesday in order to receive such payment by Friday of the following week (the “Payment Date”). Any
Invoice submitted to General Contractor after Wednesday shall not be paid until the following Friday pay
period, two weeks after such late submission. Such Invoice shall include the Estimate amount, the current
Project amount, the percentage of the Project completed to date, any previous invoiced billing amount(s),
the gross billing amount, and the current net Invoice amount.
C.
No Invoice shall be paid until General Contractor has inspected and approved the Project
services included in such Invoice. Deficiencies noted by General Contractor in work included on an
Invoice shall be remedied by the Subcontractor prior to any payment for such Invoice. It shall be the
Subcontractor’s responsibility to ensure that any deficiencies in Subcontractor’s workmanship, as noted
by General Contractor, are remedied by Subcontractor and re-inspected by the General Contractor prior
to the Wednesday immediately before the Friday on which payment may be made available to the
Subcontractor. Failure to remedy any noted deficiency prior to the current Payment Date is a default of
this Agreement which must be cured pursuant to Article 12 of this Agreement.
D.
Subcontractor shall be charged for any and all costs and expenses incurred in connection with reinspections necessitated by unacceptable materials or workmanship.
E.
Each Invoice shall be accompanied by proof of payment for any materials and labor included on
such Invoice.
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F.
Any payment made by General Contractor hereunder shall not be construed as evidence of
acceptance of any part of the work or materials furnished by Subcontractor. No payment shall constitute a
waiver by General Contractor of any right to require fulfillment of all terms of this Agreement in strict
accordance with this Agreement and any Project Workorder. All sums received by Subcontractor under
this Agreement, in conjunction with any Project, are received in trust for the express use and purpose of
paying in full all labor and materials furnished to Subcontractor in the performance of this Agreement. No
title to any payment, or any part of it, shall vest in Subcontractor or be used for any other purpose, until
Subcontractor has first paid in full all labor and materials furnished to Subcontractor by all persons who
may have supplied labor and/or materials used in the work on that particular Project.
G.
General Contractor may withhold or, on account of subsequently discovered evidence, nullify the
whole or part of any payment to the extent necessary to protect General Contractor from loss, including
costs and actual attorneys’ fees, on account of (1) defective work not remedied; (2) claims filed or
reasonable evidence indicating probable filing of claim; (3) failure of Subcontractor to make payments
properly to Subcontractor’s employees or for material, labor or fringe benefits; (4) a reasonable doubt that
this Agreement can be completed for the balance then unpaid; (5) damage to any Project or to another
subcontractor; (6) penalties assessed against General Contractor or Subcontractor for failure of
Subcontractor to comply with state, federal or local laws and regulations; or (7) any other ground for
withholding payment allowed by state or federal law, or as otherwise provided in this Agreement. When
the above matters are rectified, such amounts as then due and owing shall be paid or credited to
Subcontractor. Such withholdings may be made by General Contractor whether or not said sums are in
any way related to this Agreement or a Project or a Project Workorder. General Contractor may apply
such deducted funds to any account, related or unrelated to this Agreement or a Project or a Project
Workorder, wherein the obligations of the Subcontractor have not been discharged as determined by the
General Contractor, and wherein the General Contractor’s interest are directly or indirectly involved. In
the event Subcontractor is in default of, or breaches or fails to comply with any provision, covenant or
requirement of this Agreement; or in the event that any person or entity asserts, or indicates that he will
assert, any lien, claim, demand, or charge against the Project or land or improvements or funds related to
the Project, or the Site, the General Contractor or any surety, arising from Subcontractor’s performance of
this Agreement, the General Contractor may withhold out of any payments due or to become due to the
Subcontractor such amounts as the General Contractor, in General Contractor’s discretion, may deem
sufficient to completely protect and indemnify the General Contractor from any and all loss, damage
and/or expense therefrom, including attorney’s fees and litigation costs, until the condition requiring such
measures has been remedied by Subcontractor to the satisfaction of General Contractor. If the offending
condition is not remedied by Subcontractor within a reasonable period of time, General Contractor may,
at its option, proceed to make application of the withheld funds in whatever manner General Contractor
may, in General Contractor’s discretion, determine as being in General Contractor’s best interests.
Article 3. Subcontractor Guidelines
A.
Time is of the essence in the completion of any Project accepted by Subcontractor. Upon
Subcontractor’s acceptance of a Project, as indicated by Subcontractor’s, or Subcontractor’s
representative’s execution of the Project Workorder, Subcontractor shall promptly commence work on
said Project without undue delay. Except for normal, reasonable weather delays and/or other
unpreventable force majeure delays, as enumerated in Article 14(D) of this Agreement, Subcontractor’s
failure to promptly commence work within three (3) days of such Project’s agreed upon Project
commencement date shall constitute an incurable breach of this Agreement and shall, on such third day,
be deemed to represent Subcontractor’s intent to abandon the Project (a “Breach of Commencement”).
Upon Subcontractor’s Breach of Commencement, Subcontractor shall have no further rights in the
assigned Project and General Contractor may immediately reassign the Project for completion by another
subcontractor.
B.
If Subcontractor should default in performance of the Project Workorder or should otherwise
commit any act which causes delay to the Project, other subcontractor work on the Site or any part of the
Building Plan, Subcontractor shall be liable for all losses, costs, expenses, liabilities and damages,
including consequential damages and liquidated damages, sustained by General Contractor, or for which
General Contractor may be liable to any other party because of Subcontractor’s default. Further, whether
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or not liquidated damages and/or consequential damages are so assessed, Subcontractor agrees to pay
to General Contractor such other additional damages as the General Contractor may sustain by reason of
any such delay directly or indirectly attributable to or caused by Subcontractor, including, but not limited
to, recovery of General Contractor’s overhead and expenses related to managing and supervising the
Project during or equal to any period of time resulting from such delay of Subcontractor. Subcontractor
further agrees that neither the payment of such damages nor any liability incurred for the payment of such
damages shall release the Subcontractor from his obligation to otherwise fully perform this Agreement.
C.
Subcontractor shall be solely responsible for obtaining and paying for all necessary permits,
licenses, and any other instruments required to perform the services associated with the Project. General
Contractor will fully cooperate with Subcontractor in the obtaining of any permits and licenses, as
necessary.
D.
Subcontractor shall furnish all necessary management, supervision, labor, equipment, power,
supplies, materials, permits, machinery, tools, cartage, insurance, engineering, testing, services, facilities,
and any other act or thing required to diligently and fully perform and complete the Project in strict
compliance with any applicable plans and specifications as contained in the Project Workorder.
E.
Subcontractor shall be responsible for inspecting the Project Site, familiarizing himself with the
conditions under which the work on the Project is to be performed, checking all figures, dimensions and
measurements set forth in the Project Workorder related to Subcontractor’s work on the Project, and
correlating his observations with the requirements of the Project, and shall immediately report any
discrepancies or omissions to General Contractor. Subcontractor warrants and agrees that he shall
investigate all such matters and familiarize himself therewith to the extent that Subcontractor, in his sole
discretion, deems necessary. Failure to comply with this provision and any additional costs resulting from
such non-compliance shall be the sole responsibility of and charged to Subcontractor. Subcontractor
further agrees that General Contractor shall not be liable to Subcontractor on any claim for additional
payment or additional time or any claim whatsoever if such claim directly or indirectly results from
Subcontractor’s failure to investigate or familiarize himself sufficiently with the conditions under which a
particular Project is to be performed, including the foregoing, or from any misunderstanding thereof on the
part of the Subcontractor.
F.
Subcontractor shall maintain a competent superintendent acceptable to General Contractor on
the Project Site at all times when Subcontractor's work is in progress to ensure that the work is completed
in strict accordance with the Project Workorder, and the superintendent shall be authorized to represent
Subcontractor as to all phases of the Project. Subcontractor shall notify General Contractor prior to the
commencement of the work as to who Subcontractor's superintendent shall be and shall give prior notice
to General Contractor before any changes of superintendent shall become effective. Subcontractor shall
remove any employee from the job who is unacceptable to General Contractor.
G.
Subcontractor agrees to use due diligence in the completion of the Project and shall complete the
Project strictly in accordance with any applicable plans and specifications as contained in the Project
Workorder, in a workmanlike manner in accordance with the legally required and/or acceptable
standards, customs and practices of workmanship within the Subcontractor’s trade or profession, meeting
all local and state building codes, including the Uniform Building Code or other applicable local
regulations, and in the most expeditious, sound and economical manner.
H.
Subcontractor shall effectively secure and protect the work done on the Project and assume full
responsibility for the condition thereof until final acceptance by General Contractor. Subcontractor further
agrees to provide such protection as is necessary to protect the work and the workers of General
Contractor and other subcontractors from Subcontractor’s operations. Subcontractor shall repair or
replace, at Subcontractor’s own expense, any property, surfaces, structures or conditions damaged as a
result of, or arising out of Subcontractor’s work. Any unsafe conditions or working practices caused by or
attributable to Subcontractor, or relating to Subcontractor’s scope of work, shall be immediately remedied
by and at the sole expense of Subcontractor, and General Contractor shall not be liable to
Subcontractor's employees or any other third party for unsafe conditions related to or caused by
Subcontractor's performance of this Agreement. Subcontractor is specifically responsible and liable for all
aspects of Subcontractor’s use of work space jointly used by different subcontractors, and General
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Contractor specifically does not retain supervisory control of such joint use areas for purposes of liability
for unsafe conditions.
I.
All work covered by this Agreement done at the Site or in preparing or delivering materials or
equipment, or any or all of them, to the Site shall be at the risk of Subcontractor exclusively until the
completed work is finally accepted by General Contractor.
J.
In the event Subcontractor shall use General Contractor’s equipment, materials, labor, supplies or
facilities, Subcontractor shall reimburse General Contractor at a predetermined rate, except as otherwise
stated herein. Further, Subcontractor assumes all responsibility for physical damage to such equipment,
materials, labor, supplies, or facilities used by Subcontractor or Subcontractor’s agents, employees, or
permittees. In the event that General Contractor’s employees are used by Subcontractor, Subcontractor
shall have full responsibility for all acts or omissions of General Contractor’s employees with regard to
Subcontractor’s use or employment of them. Subcontractor accepts any and all of General Contractor’s
equipment, materials, labor, supplies or facilities as furnished. If, at the request of Subcontractor, General
Contractor permits Subcontractor’s personnel to use General Contractor’s equipment, owned or rented,
such as hoisting equipment, safety planks, ladders and scaffolds, Subcontractor will indemnify General
Contractor and hold General Contractor harmless from any and all liability, claims, actions, demands,
damages, and expenses, including without limitation, attorneys’ fees arising out of injury to persons or
property in any connection with such use of General Contractor’s services, facilities, or equipment.
Subcontractor agrees to indemnify General Contractor and hold General Contractor harmless from any
and all liability, claims, actions, demands, damages, and expenses, including without limitation, attorneys’
fees arising out of injury to persons or property in any connection with such use of any equipment, tools
or devices within the control of Subcontractor, whether owned, rented, leased or borrowed by
Subcontractor.
K.
Except as otherwise specified within this Agreement, General Contractor shall have complete
control of the Site on which the Project is to be performed and shall have the right to decide the time and
order in which various portions of the Project shall be installed and the relative priority of the work of
Subcontractor and other subcontractors, and, in general, all other matters pertaining to the timely and
orderly conduct of the work of Subcontractor on the Site.
L.
Subcontractor shall report to General Contractor all accidents to or by Subcontractor’s personnel
or equipment which occur at the Project Site. Copies of accident reports shall be given to General
Contractor within 24 hours of the occurrence.
M.
Subcontractor shall not accept any changes to the Project Workorder from any person or entity,
other than the General Contractor.
N.
If General Contractor requests or requires any change either expanding or limiting the work to be
performed under the Project Workorder (a “Change Order”), Subcontractor shall accept such Change
Order from General Contractor. General Contractor agrees to provide Subcontractor with written notice of
any such Change Order as soon as practical after General Contractor receives such notice. Any resulting
increase or decrease in the Project price caused by a Change Order, pursuant to this Article 3(N), must
be in writing, mutually agreed to, and signed by both parties. If the parties are unable to reach an
agreement regarding any price adjustment for a Change Order, Subcontractor will proceed with the work,
as per the Change Order, and the matter shall be submitted to arbitration under the laws of Texas within
30 days from the issuance of the Change Order. Such arbitration shall set the Change Order price
allowing General Contractor a reasonable profit, after considering direct costs and reasonable overhead
expenses. Such arbitration costs for determination of price shall be equally split between Subcontractor
and General Contractor, regardless of the decision made by the arbitrator. Both Parties shall abide by the
decision of the arbitrator.
O.
Subcontractor shall perform the services required for a particular Project in a professional manner
that does not harm the reputation of General Contractor. Subcontractor and Subcontractor’s employees
are required to wear appropriate clothing at all times while on the Project. No articles of clothing that
displays lewd or vulgar illustrations or language shall be permitted.
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P.
Subcontractor shall not discuss any pricing issues with a customer of the General Contractor, a
competitor of the General Contractor, or any third party. Subcontractor shall refer any customer questions
directly to the General Contractor.
Q.
Subcontractor shall keep the Project Site clean of debris at all times and shall be responsible for
cleaning the work area and properly disposing of any debris related to Project services prior to payment
of any Invoice.
R.
Unless Subcontractor receives the express, written consent of the General Contractor,
Subcontractor shall not hire or engage the services of any agent or subcontractor, who is not a W-4
employee of Subcontractor, to perform any service or portion of the work required to complete the
Project.
S.
Subcontractor must leave Site free of any and all liens and claims of lien, suits, encumbrances
and/or stop notices chargeable to the Subcontractor. Subcontractor shall have sole responsibility for
paying any supplier, Subcontractor’s employee, or other person for supplies, services performed, and/or
work done on any Project assigned by General Contractor to Subcontractor. Subcontractor shall ensure
that no supplier, Subcontractor employee or subcontractor will place a lien on any property that is the
subject of a Project or that is owned or controlled by the General Contractor or its affiliates. Subcontractor
agrees within ten (10) days after written demand to cause the effect of any such lien, claim, suit,
encumbrance and/or stop notice to be removed, and in the event Subcontractor shall fail so to do,
General Contractor is authorized to use whatever means in its discretion General Contractor may deem
appropriate to defend, dismiss, resolve, remove or dismiss same, and the cost thereof, together with
actual attorneys’ fees, shall be immediately due and payable to General Contractor by Subcontractor. In
case suit is brought on any claim, lien, encumbrance or stop notice labor performed or materials used on
or furnished to the project, Subcontractor shall pay and satisfy any such amount or judgment as may be
established by the decision of the arbitrator and/or court in said suit, or through settlement. Subcontractor
may litigate any such lien or suit provided it causes the effect thereof to be removed, promptly in advance,
from the Site and/or Project, and shall do such further things as may be necessary to prevent damage,
monetary or otherwise, to General Contractor by reason of such liens, suits, encumbrances or stop
notices. Subcontractor hereby gives to General Contractor the authorization and right to setoff any
payments due to Subcontractor in order to pay any legitimate and proven claim made by a supplier,
Subcontractor employee, or subcontractor whose claim arises from the Project assigned to
Subcontractor.
T.
Subcontractor shall not at any time, during a Project or after completion of a Project, place a lien
on any property that is the subject of such Project or that is owned or controlled by General Contractor or
its affiliates. Any unresolved differences between Subcontractor and General Contractor shall be resolved
by arbitration.
U.
Subcontractor shall provide unconditional final lien waivers and releases from Subcontractor,
material and equipment suppliers and any subcontractor, whether approved or not, upon final payment of
all sums due to Subcontractor for the Project Workorder.
V.
Subcontractor agrees that he shall not directly or indirectly solicit, hire, or otherwise retain or
engage, whether as an employee, independent contractor or otherwise, any employee, personnel or
subcontractor of the General Contractor or its affiliates for the duration of this Agreement and for the
sooner of one (1) year after the termination of this Agreement or such person’s termination by the
General Contractor.
Article 4. Rules Concerning Drugs and Alcohol
A.
General Contractor strictly prohibits the use, possession, sale, transfer, purchase or being under
the influence of any drug or alcohol by subcontractors or their employees at any time on General
Contractor’s Site or while conducting General Contractor’s business.
B.
Subcontractors or their employees shall not report for duty or be on General Contractor property
or Projects while under the influence of an illegal drug or alcohol.
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C.
No prescribed drug shall be brought on General Contractor’s premises or Site by any person
other than the one for whom it is prescribed. Such drugs can only be used in the manner, combination
and quantity prescribed and only providing there are no safety concerns involved with such drug’s use.
D.
General Contractor shall not condone the off-duty use of any drug or alcohol that results in
excessive absenteeism or tardiness or which may result in accidents or poor workmanship.
E.
Any Subcontractor found to be in violation of the General Contractor's Drug and Alcohol Policy
shall be immediately terminated from all current or future contracts with General Contractor.
F.
Subcontractor shall immediately terminate any subcontractor employee found to be in violation of
the General Contractor's Drug and Alcohol Policy from any further work on General Contractor's and its
affiliates’ property or Projects.
G.
The following definitions refer to this Article 4 of the Agreement:
i.
Alcohol is any beverage that may be legally sold and consumed and has an alcohol
content more than three percent (3%) by volume.
ii.
Drug means any substance that can alter a person's mood, perception, pain level or
judgment. Drug also includes alcoholic beverages, inhalants and illegal drugs.
iii.
Prescribed Drug is any substance prescribed by a licensed medical practitioner.
iv.
Illegal Drug is any drug or controlled substance whose use, possession, sale, transfer or
purchase is illegal under local, state or federal laws.
Article 5. Insurance
A.
The Subcontractor, at Subcontractor’s own expense, and, notwithstanding the requirement for
Subcontractor to obtain the written acceptance of General Contractor for the use of a third party
subcontractor, any subcontractor of Subcontractor, at such subcontractor’s own expense, shall obtain and
maintain in full force and effect at all times, without interruption during the term of this Agreement and
during Subcontractor’s performance of the Project at the Site under a Project Workorder, not less than the
following coverage and limits of insurance which shall be maintained by Subcontractor and
Subcontractor’s subcontractor under forms of policies and from companies satisfactory to General
Contractor:
i.
Workers’ Compensation Insurance – Regardless of any state or federal statutory
requirement, such insurance shall be procured and maintained to cover the legal liability
of the Subcontractor and its subcontractors (if such are expressly permitted by General
Contractor) under the applicable workers’ compensation or occupational license laws
relating to claims for the personal injuries and/or death of the Subcontractor and/or the
Subcontractor’s employees. The limits of the required coverage shall be the higher of:
(a)
(b)
Statutory
Employer’s Liability:
Statutory Limits
$1,000,000.00 Each Accident
$1,000,000.00 Disease – Policy Limit
$1,000,000.00 Disease – Each Employee
ii.
Commercial General Liability Insurance – Such insurance shall cover the legal liability
(including liability assumed contractually, whether incidental or not) of the Subcontractor (and any of its
subcontractors, if expressly permitted by the General Contractor), who may be engaged in a Project, for
claims for personal injuries (including death) and any property damage resulting therefrom arising out of
Project to be completed by the Subcontractor (or any of its subcontractors, if expressly permitted by the
General Contractor), in an amount not less than $1,000,000.00 for any one occurrence, $2,000,000.00
general aggregate (subject to a per Site/location general aggregate provision), and with a $2,000,000.00
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Products/Completed Operations aggregate limit. The Commercial General Liability insurance should be
occurrence form and shall include contractual liability coverage, products/completed operations coverage,
cross liability coverage, severability of interest and property damage coverage (A CG 00 01 Coverage
Form or its equivalent is required).
iii.
Automobile Liability Insurance – Such insurance shall cover the legal liability (including
liability assumed contractually, whether incidental or not) of the Subcontractor (or any of its
subcontractors, if expressly permitted by the General Contractor), who may be engaged in the Project, for
claims for personal injuries and death resulting therefrom and for property belonging to other than the
Subcontractor caused by highway licensed vehicles of or used by the Subcontractor in an amount not
less than $1,000,000.00, combined single limit. Automobile Liability insurance shall provide coverage for
Subcontractor-owned, -hired or non-owned automobiles or other automotive equipment.
iv.
Umbrella Coverage – Such insurance shall be in excess of other required insurance and
be maintained at a minimum of $1,000,000.00 umbrella covering any accepted Project.
v.
Crane Insurance – If the Subcontractor or, if permitted by the General Contractor,
Subcontractor’s subcontractors use any owned, leased, chartered or hired crane of any type,
Subcontractor shall maintain a General Liability insurance policy, with a Riggers Liability endorsement
attached to the policy, in an amount not less than $5,000,000.00 per occurrence.
vi.
Completed Operations Coverage – Subcontractor, and any subcontractor of
Subcontractor, shall maintain and evidence Completed Operations Coverage for a minimum of three (3)
years subsequent to the completion of any Project per the limits shown above.
B.
Copies of all insurance policies shall be provided to General Contractor by Subcontractor within
twenty-four (24) hours of General Contractor’s request for such policies, whether such request be made
in person or in writing.
C.
The General Contractor, its subsidiaries, officers, members, directors, employees, and agent
shall be named as an Additional Insured for ongoing Projects and completed Projects by having the
insurance carrier issue an Additional Insured Endorsement(s) with the ISO CG2010 11/85 or its
equivalent on all such policies. Copies of these endorsements should be attached to the Certificate of
Insurance and shall be updated for any insurance renewals. Subcontractor hereby authorizes General
Contractor to contact insurer, speak with agents and representatives of insurer.
D.
Certificates of insurance must also include a waiver of subrogation issued by the Subcontractor’s
or its subcontractor’s insurance carrier in favor of the General Contractor, its subsidiaries, officers,
members, directors, employees, and agents for General Liability, Auto Liability, and Workers
Compensation. The Subcontractor hereby waives and relinquishes any right of subrogation against
General Contractor and its subsidiaries, agents, representatives, employees, and affiliates which they
might possess for any policy of insurance provided under this Article 5(C) or under any State or Federal
Workers’ Compensation or Employer’s Liability Act.
E.
The Subcontractor’s general liability, automobile liability and excess insurance coverage shall be
primary and non-contributory with respect to work on any Project for the General Contractor, its
subsidiaries, officers, members, directors, employees, and agents. The Subcontractor, in its agreements
with subcontractors (if expressly permitted by General Contractor), shall require each such permitted
subcontractor to obtain insurance meeting the minimum limits and incorporating the contractual
requirements that are prescribed within this Article 5.
F.
Subcontractor shall require its insurers to notify General Contractor in writing thirty (30) days prior
to the effective date of any cancellation or material change in any of the required policies. To the extent
that the Subcontractor utilizes deductibles in conjunction with the insurance required by this Agreement,
all costs of such deductibles shall be assumed by the Subcontractor. Insurance shall be placed with
insurers with an AM Best rating of not less than A- VIII.
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G.
Proof of all insurance required in Section 5(A) shall be submitted to General Contractor in the
form required by this Section 5 fifteen (15) or more days prior to the commencement of any Project.
General Contractor may contact Subcontractor’s insurers at any time to confirm that the required
insurances and endorsements are in effect.
H.
General Contractor reserves the right to require Subcontractor to increase the limits of liability for
any of the above-required insurances.
I.
No payment for any Project shall be made to Subcontractor unless and until all above-required
proof of insurance has been submitted to General Contractor. General Contractor shall ensure that all
required insurance is current and in effect prior to any payment to Subcontractor.
J.
Any cancellation of the required insurances shall result in cessation of the then current Project
assigned to Subcontractor until the required insurance is demonstrated to be valid and in effect.
Subcontractor shall not perform any portion of such Project until the required insurances are renewed and
in effect. Subcontractor shall be liable for any costs for any delays resulting from a cessation of insurance.
A cessation lasting longer than three (3) days may result in the Subcontractor’s replacement on the
Project and any costs for such delay shall be assessed to the Subcontractor and may be deducted from
funds due to Subcontractor for past services performed for General Contractor.
Article 6. Bonding of Subcontractor.
Concurrently with the execution of this Agreement, Subcontractor shall, if required by General
Contractor, execute a labor and material bond and performance bond, in an amount equal to one hundred
percent (100%) of the Project price. Said bonds shall be executed by a corporate surety acceptable to
General Contractor and shall be in a form satisfactory to General Contractor. Subcontractor shall pay the
premium on said bonds unless otherwise provided herein or in the Project Workorder.
Article 7. Warranty.
A.
For a period of one (1) year after transfer of ownership to a home buyer (unless the Texas
Property Code (the “Code”) specifies a greater minimum statutory warranty requirement, in which such
case, the statutory period specified in the Code shall apply), Subcontractor warrants its work against all
defects in materials or workmanship and warrants that all such work was completed in conformance with
the Project Workorder and Building Plan.
B.
Subcontractor warrants to General Contractor and any subsequent purchaser of the final
structures and property affiliated with a Project Site that all goods, materials, and equipment furnished as
part of the work shall conform to the Project Workorder and/or other descriptions furnished by General
Contractor and that the goods, materials and equipment shall be merchantable, free from defect, new, of
good workmanship and quality, and fit for any particular purpose for which the goods, materials or
equipment are required.
C.
Subcontractor further warrants that all materials shall be free of hazardous substances including,
but not limited to, asbestos.
D.
All such warranties shall survive inspection, testing and acceptance of the goods and shall extend
to future performance of the goods or materials.
E.
These warranties are in addition to the other remedies General Contractor has under this
Agreement and Texas law.
F.
Upon receipt of notification from General Contractor, Subcontractor shall correct at
Subcontractor's sole cost and expense any defects or deficiencies in the materials or workmanship which
arise during the period of Subcontractor's warranty/guarantee. If Subcontractor shall fail to correct the
defects and/or deficiencies within seventy-two (72) hours of receipt of notice from General Contractor,
General Contractor may without further notice provide the labor and materials necessary to correct the
defects and/or deficiencies and the cost thereof shall be charged to the Subcontractor. In the event there
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are insufficient funds to satisfy such deduction, Subcontractor shall reimburse General Contractor for
such costs immediately upon receipt of written demand from General Contractor.
Article 8. OSHA Compliance
A.
Subcontractor shall fully comply with all workplace safety regulations promulgated by the
Occupational Safety and Health Administration (“OSHA”). Subcontractor shall ensure that Subcontractor’s
employees and any subcontractors, if permitted by the General Contractor, are in compliance with OSHA
at all times while engaged in Projects under control of the General Contractor. It shall be the
Subcontractor's responsibility to furnish and pay for special tools, equipment and personal protection
equipment necessary to comply with OSHA standards or other agency regulations that pertain to the
Project.
B.
Subcontractor shall comply fully with all laws, orders, citations, rules, regulations, standards and
statutes affecting or relating to this Agreement and the Project or the performance thereof, including but
not limited to those with respect to the handling and storage of hazardous materials, accident and illness
prevention, safety equipment and practices, and compliance with all applicable environmental rules and
regulations, including those relating to sediment and erosion control, storm water discharge, and air,
ground and water quality. Subcontractor shall conduct inspections and monitoring to determine
compliance with all of the foregoing and that safe working conditions and equipment exist. Subcontractor
accepts sole responsibility for providing a safe work environment for its employees and for suppliers of
material and equipment, and for any person or entity that may be affected by Subcontractor’s work, for
adequacy of and required use of all safety protective measures and equipment, and for full compliance
with the aforesaid laws, orders, citations, rules, regulations, standards and statutes.
Article 9. State and Federal Taxes & Employer Compliance
A.
Subcontractor shall be solely responsible for payment of all employment, sales and income taxes
due to the requisite state, if any, and to federal taxing authorities on any funds earned as payment for
Projects.
B.
Subcontractor shall ensure that all of Subcontractor’s employees are documented and legally
permitted to work in the United States. Subcontractor shall require every employee of Subcontractor to
complete and execute a W-4 with Subcontractor.
C.
If, on any Project, the use of a subcontractor is expressly permitted by the General Contractor,
Subcontractor shall require each and every of Subcontractor’s subcontractors to complete and execute a
W-9 with Subcontractor. Subcontractor shall provide a copy of such complete and executed W-9 for each
such subcontractor if requested by the General Contractor. If Subcontractor fails to submit such required
copies, General Contractor may hold any payment to Subcontractor until such required copies are
properly completed and provided to General Contractor.
D.
Subcontractor shall comply with and agrees to be bound by all applicable federal, state and local
laws and regulations, including, but not limited to, all provisions of the Fair Labor Standards Act, the
Americans With Disabilities Act, the federal Family and Medical Leave Act, the Texas Labor Code, all
immigration and work authorization laws and regulations, and all other laws and regulations relating to the
employment relationship, including compensation, benefits, workers compensation, and wage and
hour requirements.
Article 10. Indemnification
The work performed by the Subcontractor shall be at the risk of the Subcontractor exclusively.
Subcontractor hereby indemnifies and holds General Contractor, its subsidiaries, parent, affiliates and
their respective officers, members, directors, employees and agents, harmless from and against any and
all claims, actions, losses, settlements, judgments, or expenses, including reasonable attorneys’ fees,
arising from or in any way connected with the work performed, materials furnished, or services provided
to General Contractor in association with any Project Workorder during the term of this Agreement. Such
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indemnity as provided by this Article 10 shall not be limited by the insurance requirements set forth in
Article 5 of this Agreement.
Article 11. Arbitration and Waiver of Jury Trial
A.
At the request of either party, any controversy or claim arising out of or relating to this Agreement,
or the default thereof, shall be submitted to binding arbitration under the Commercial Arbitration Rules of
the American Arbitration Association. Unless otherwise agreed to by both parties, the location for any
arbitration proceedings concerning this Agreement shall be in Tarrant County, Texas. In the event that a
party hereto initiates a lawsuit in court concerning an arbitrable claim, controversy or dispute, such party
shall pay the other party for the costs, including attorneys’ fees that the other party incurs to obtain an
order from the court to stay or dismiss the lawsuit or otherwise compel arbitration. Any arbitration shall be
conducted by arbitrators approved by the American Arbitration Association (“AAA”) or the Judicial
Arbitration and Mediation Services (“JAMS”) and mutually acceptable to the parties. All such disputes,
controversies, or claims shall be conducted by a single arbitrator, unless the dispute involves more than
$50,000 in the aggregate in which case the arbitration shall be conducted by a panel of three arbitrators.
If the Parties are unable to agree on the arbitrator(s), then the selected arbitration organization shall
select the arbitrator(s). In the event of any conflict between the rules of the selected arbitration
organization and this Agreement, this Agreement shall control. Except as provided below, each party
shall be responsible for its own attorneys’ fees incurred during the course of the arbitration, as well as the
costs of any witnesses or other evidence such party produces or causes to be produced. The arbitrator
shall be authorized to award such relief as is allowed by law. The arbitration award shall be in writing and
shall include findings of fact, conclusions of law, and a statement of the reasons for the award. Except as
required by law, such award shall be kept confidential, and shall be final, binding, non-appealable, and
fully enforceable by a court of competent jurisdiction under the Federal Arbitration Act. Except as
otherwise stated in this Agreement, the prevailing party in the resolution of any dispute (a “Dispute
Resolution”), concerning this Agreement, any provision hereof or any actual or alleged breach, shall be
entitled to its reasonable attorneys’ fees, including investigation and costs of discovery, and other costs
connected with such Dispute Resolution, in addition to all other recovery or relief. The prevailing party
shall be that party receiving substantially the relief sought or successfully defending substantially the
position maintained in the Dispute Resolution, whether or not brought to final award or judgment. Except
as otherwise stated in this Agreement, all costs of arbitration shall be the responsibility of the nonprevailing Party. The costs associated with an arbitration in which the arbitrator’s decision is split shall be
paid by the Parties in a manner proportionate to such split decision. Notwithstanding the foregoing, the
parties agree that in the event of any litigation hereunder, the exclusive venue and place of jurisdiction for
such litigation shall be in the state courts or the federal district courts, situated in Dallas County, Texas,
and each party hereto specifically consents and submits to the personal jurisdiction of such courts.
B.
EACH PARTY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANYWAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH
RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY ARBITRATION,
AND IF BY COURT TRIAL, WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE SIGNATORIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Article 12. Default and Termination
A.
The occurrence of any of the following shall constitute a material default under this agreement:
i.
The failure to make a required payment when due, except when such payment has been
refused due to deficiencies on the part of Subcontractor;
ii.
The failure or refusal of Subcontractor to supply sufficient properly skilled workers or
sufficient materials of proper quality; or
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iii.
The failure of Subcontractor to deliver the services in the time and manner provided for in
the Agreement.
B.
If Subcontractor fails to cure any default within three (3) days after General Contractor has
provided written notice of such default, in accordance with Article 13 of this Agreement, General
Contractor shall, at its option and without prejudice to any right or remedy it may have at law or in equity,
have the right to any or all of the following remedies:
i.
General Contractor may supply such number of workers and quantity of materials,
equipment and other facilities as General Contractor deems necessary for the completion of
Subcontractor’s work, or any part thereof which Subcontractor has failed to complete or perform, and
charge the cost thereof to Subcontractor, who shall be liable for the payment of same including
reasonable overhead, profit, and actual attorneys’ fees incurred as a result of Subcontractor’s failure of
performance;
ii.
General Contractor may contract with one or more additional subcontractors to perform
such part of Subcontractor’s work as General Contractor shall determine will provide the most expeditious
completion of the total work and charge the cost thereof to Subcontractor, who shall be liable for the
payment of same including reasonable overhead, profit, and actual attorneys’ fees incurred as a result of
Subcontractor’s failure of performance; or
iii.
General Contractor may withhold payment to Subcontractor pending corrective action to
the extent required by and to the satisfaction of General Contractor.
C.
In the event of an emergency or conditions affecting the safety of persons or property, General
Contractor may proceed, as per Parts i-iii of Article 12(B) above, and without notice.
D.
If either party defaults by failing to substantially perform any material provision, term or condition
of this agreement, the other party may elect to terminate this agreement if the default is not cured within
five (5) days after providing written notice, in accordance with Article 13of this Agreement, to the
defaulting party. The notice shall describe with sufficient detail the nature of the default.
i.
In the event of a termination pursuant to this Article 12(D), resulting from the default of
Subcontractor, Subcontractor’s failure to commence and satisfactorily continue correction of a default
within twenty-four (24) hours after receipt by Subcontractor of the notice issued under Article 13 of this
Agreement, shall permit General Contractor to terminate Subcontractor’s right to perform under this
Agreement and use any materials, implements, equipment, appliances or tools furnished by or belonging
to Subcontractor to complete Subcontractor’s work without any further compensation to Subcontractor for
such use. General Contractor also may furnish those materials and equipment, and/or employ such
workers or subcontractors as General Contractor deems necessary to maintain the orderly progress on
the work. In such case, Subcontractor shall be entitled to no further payment until the balance of
Subcontractor’s work has been completed. At that time, all of the costs and expenses incurred by General
Contractor as a result of Subcontractor’s default, including the costs incurred in performing
Subcontractor’s work, plus a markup of fifteen percent (15%) for overhead and profit on such expenses,
plus actual attorneys’ fees as provided above, shall be deducted from any monies due or to become due
to Subcontractor. Subcontractor shall be liable for the payment of any amount by which such expenses,
and
costs may exceed the unpaid balance of the Project Workorder price.
E.
Unresolved disputes arising from any default shall be decided by arbitration under the provisions
of Article 11(A).
F.
General Contractor may at any time and for any reason terminate Subcontractor’s services and
work at General Contractor’s convenience with seven (7) calendar days’ notice, in accordance with Article
13 of this Agreement. The effective date of termination shall be seven (7) calendar days after
Subcontractor’s Receipt of written notice. Upon Receipt of such notice, Subcontractor shall, unless the
notice directs otherwise, immediately discontinue the work and placing of orders for materials, facilities
and supplies in connection with the performance of this Agreement, and shall, if requested, make every
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reasonable effort to procure cancellation of all existing orders or contracts upon terms satisfactory to
General Contractor or, at the option of General Contractor, give General Contractor the right to assume
those obligations directly, including all benefits to be derived therefrom. Subcontractor shall thereafter do
only such work as may be necessary to preserve and protect the work already in progress and to protect
materials and equipment on the job site or in transit thereto. Upon termination under this Article 12(F),
Subcontractor shall be entitled to payment in accordance with Article 2 only as follows:
i.
The actual cost of the work completed in conformity with this Agreement and/or the
Project Workorder; plus
ii
Such other costs actually incurred by Subcontractor as are permitted by the Project
Workorder and Building Plan; less
iii.
The amount of any payments made to Subcontractor prior to the date of the termination
of this Agreement.
In no event shall payment due under this Article 12(F) exceed the amount due for approved units of work
or percentage of completion. Subcontractor shall not be entitled to any claim of lien against General
Contractor for any additional compensation or damages in the event of such termination and payment.
Article 13. Notice
All notices, requests, and approvals required or permitted by this Agreement shall be in writing
and addressed/directed to the other party at the address/facsimile number below or at such other address
of which the notifying party hereafter receives notice in conformity with this Article 13. All such notices,
requests, and approvals shall be deemed given upon the earlier of facsimile transmission or actual receipt
(both “Receipt”) thereof:
To General Contractor:
SGC Homes, LLC
201 E. Abram Street, Suite 120
Arlington, Texas 76010
Fax: (817)462-1692
Attn: Isaiah Spates
To Subcontractor:
Fax:
Attn:
Article 14. Miscellaneous
A.
Commencing any work on a Project shall constitute Subcontractor’s acceptance of the terms and
conditions of this Agreement of any Project Workorder, of the conditions that may affect the work, and of
the surface over which the work is being performed.
B.
The parties hereto are independent contractors and nothing contained herein shall be interpreted
to create, to intend to create, nor shall be deemed or construed to create, any joint venture, partnership,
agency or other relationship between General Contractor and Subcontractor other than that of
independent entities contracting with each other solely for the purpose of carrying out the provisions of
this Agreement. Subcontractor is an independent subcontractor and is not an employee of the General
Contractor. Neither of the Parties to this Agreement, nor any of their respective employees, agents, or
other representatives, shall be construed to be the agent, employee or representative of the other party.
Neither Party shall have the authority to bind the other Party nor shall a Party be responsible for the acts
or omissions of the other Party, unless otherwise stated in this agreement. Similarly, Subcontractor
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expressly acknowledges that Subcontractor is not an agent, employee, or representative of the buyer of
the property Site which is the subject of any particular Project and covenants to represent itself
accordingly.
C.
Upon any Termination of this Agreement, the following provisions shall survive such termination
or expiration of this Agreement and shall remain in effect: Article 2 (Payments), Article 3 (Subcontractor
Guidelines), Article 5 (Insurance), Article 7 (Warranty), Article 9 (State and Federal Taxes & Employer
Compliance), Article 10 (Indemnification), Article 11 (Arbitration and Waiver of Jury Trial), Article 12
(Default and Termination), and Article 14 (Miscellaneous).
D.
Reasonable additional, unexpected costs directly related to an existing, concealed condition that
may be revealed during construction, shall be the sole responsibility of General Contractor. Further,
Subcontractor shall not be held responsible for reasonable delays caused by such conditions. This
agreement is subject to force majeure, including without limitation, accidents, acts of God, fire, explosion,
vandalism, storm, weather conditions, labor strikes, orders or acts of military or civil authority, national
emergencies, insurrections, riots, wars, or other delays beyond the reasonable control of the parties.
Subcontractor shall not be held responsible for reasonable delays caused by such events, but shall use
reasonable efforts under the circumstances to avoid or remove such causes of non-performance. In the
event of delays, which are not the fault of Subcontractor, General Contractor shall allow reasonable
additional time equal to such delays for Subcontractor’s completion of the Project. No claims for additional
compensation or damages for such delays, whether caused in whole or in part by any conduct on the part
of the General Contractor, including, but not limited to, conduct amounting to a breach of this Agreement,
or delays by other subcontractors, shall be recoverable from General Contractor.
E.
Neither Party hereto shall be deemed to have waived any of its rights, powers or remedies
hereunder except in an express writing signed by an authorized agent or representative of the Party to be
charged with such waiver. The failure of either Party to pursue a breach or default of any term or
provision of this Agreement by the other Party shall not be construed as a waiver of a Party’s rights to
pursue any subsequent breach or default of this Agreement.
F.
Except as otherwise stated in Article 5 of this Agreement, this Agreement may be modified or
amended only if made in writing and signed by both Parties.
G.
This Agreement shall be in full force and effect from the Effective Date unless terminated in
writing pursuant to Article 12 of this Agreement or with ninety (90) days’ written notice by Subcontractor.
The termination of this Agreement shall not negate any term or condition of the insurance requirements
in Article 5.
H.
All references in the Agreement to the singular shall include the plural, as context may require,
and all references to gender shall, as appropriate, include other genders.
I.
This Agreement shall be construed and performed in accordance with the laws of the State of
Texas, without reference to Texas choice of law or conflicts rules.
J.
The titles to the articles of this Agreement are solely for the convenience of the parties and shall
not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this Agreement.
K.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a
part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
L.
Neither Party may assign or transfer this Agreement without the express prior written consent of
the other Party, which consent shall not be unreasonably withheld.
Subject to the foregoing, this
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agreement shall be binding upon, and inure to the benefit of, the Parties and their respective heirs,
administrators, executors, representatives, successors and permitted assigns. Nothing herein, express or
implied, is intended to confer upon any person, other than the Parties and their respective heirs,
administrators, executors, representatives, successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
M.
This Agreement, and any subsequent Project Workorders, shall constitute the entire agreement
between the Parties and supersede all prior agreements, representations, warranties, statements,
promises, information, arrangements and understandings, whether oral or written, express or implied, with
respect to the subject matter hereof. The Parties further acknowledge and agree that, in entering into this
Agreement, they have not in any way relied, and will not in any way rely upon any oral or written
agreements, representations, warranties, statements, promises, information, arrangements or
understandings, express or implied, not specifically set forth in this Agreement, any subsequent Project
Workorders, or in such schedules, documents or instruments which may be hereto attached.
N.
This Agreement may be executed and delivered by the Parties hereto in any number of
counterparts, each of which shall be deemed an original and all of which together shall constitute one and
the same instrument. In proving this Agreement in any judicial or arbitration proceedings, it shall not be
necessary to produce or account for more than one such counterpart signed by the party against whom
such enforcement is sought. Delivery of a signature hereto by facsimile transmission or by e-mail
transmission of an Adobe portable digital file (PDF) shall be as effective as delivery of a manually
executed counterpart hereof, and any such facsimile or PDF signature shall be treated as an original
signature hereto.
O.
In the event of a conflict between this Agreement and any previous or subsequent agreements or
any Project Workorder, the terms of this Agreement shall control.
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IN WITNESS WHEREOF, this Agreement is executed by the Parties’ authorized officers and
representatives and shall be effective as of the Effective Date.
SUBCONTRACTOR:
Company: ____________________________ By:_______________________________
Title: _________________________________ Date:_____________________________
GENERAL CONTRACTOR:
SGC Homes, LLC
By:__________________________________
Title: ________________________________ Date: _____________________________
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